Resilience is a quality we cultivate in ourselves and try to instill in our businesses because the greatest life or business plan in the world can’t prepare us for every tough challenge or unforeseen situation. Well, the ongoing interruptions in the supply chain, the war in Ukraine, continual mutations in the COVID virus, a tight labor market, and rising rates of interest and inflation certainly check many of the tough challenges boxes. What lessons did you learn from the COVID pandemic and how have you positioned your company to meet future challenges? From our work with owners of companies in a wide variety of industries, we’ve identified four ways to make your business resilient.
1. Pay Attention to Relationships.
It’s easy to overlook the importance of our important relationships when we are trying to put out fires and keep an eye on the bottom line. Collecting and interpreting data are important, but their usefulness is limited when your company is hit with a challenge you couldn’t have anticipated. Your best resource when confronted with multiple challenges are the relationships you’ve established with your key people, vendors, customers and advisors. These relationships are the foundation for operational resilience. Peter Drucker, Founder of the Drucker Institute, observed, “It is the relationship with people, the development of mutual confidence, the identification of people, the creation of community. This is something only you [the leader of your business] can do.” https://drucker.institute/thedx/measurement-myopia. Our clients build foundations for resilience by surrounding themselves with competent people and nurturing trusting relationships with them.
2. Focus on the Right Numbers.
While data isn’t the foundation for resilience, your company’s metrics are important decision-making tools. The key is knowing which best measures performance and enables your leadership team to make reasonable forecasts. These metrics are the ones that allow you to see around the corner and give you the confidence to believe what you see.
3. Minimize Your Importance.
If your business is highly dependent on your ideas, your skills, your network, your relationships with vendors and your experience, your business isn’t resilient. It’s only as creative and connected as one person can be. Resilient companies are (by definition) great problem solvers, and they’re run by groups of people who share a common vision and whose many talents complement one another.
4. Build in Agility.
Resilient companies are organized to pivot quickly. They have a formal form of governance (or rules and processes) that guide 1) how decisions are made for and within a company and by whom, and 2) the types of decisions people in various positions are authorized to make. The internal structures provide a forum for communication where all perspectives could be heard before important decisions were made, and a means to bring everyone into alignment with a new vision.
As business transition advisors, we are very interested in your take: What are you doing to make your company resilient? We are always learning, so give us a call. Share your wisdom! We’d love to hear from you. Click here to contact us.
Elizabeth Ledoux is a co-author of the award-winning It’s A Journey: The MUST-HAVE Roadmap to Successful Succession Planning, as well as Accelerate Your Entrepreneurial Flight and Understanding the Growth of the Entrepreneur. She frequently speaks to organizations and business owners about challenges and opportunities in private and family business transitions, business and individual growth, and the business succession journey.
She serves as Chair for TIGER 21 in Denver, Colorado and was Chair for 14 years of the Women Presidents’ Organization’s Denver chapter.